Long question regarding a difficult circumstance

Apologies for the lengthy post, but I feel background needs to be established in order to put my question is its proper context.

Background
Our new community consists of the following. About 150 townhomes and about 500 single family homes. There is a clubhouse, pool, large patio, basketball court, and playground that are for the use of the entire community and funded through a monthly assessment of about $95 against all 650 units.

205 of the single-family homes are designated as an age restricted, 55+ community. This community has its own clubhouse and pool, which are funded by an additional $25/month assessment just against the 55+ lot owners.
Unfortunately, very early in the development of the community it became apparent that there was a general feeling of animosity from the “younger” side of the community against the 55+ side. They feel it is “not fair” that the 55+ side has their own amenities, and no explanation of the facts can change their feelings. When the developer gave up control of the board in May, a board was elected and the entire younger side of the community only voted for themselves, so people who despise the 55+ side dominate the board. The 55+ side only has one of the five board positions, and it is unlikely this will every change.

Very quickly the new board has wasted no time trying to inflict pain on us. When a resale resulted in a child living here in conflict of our age restrictions, they quickly granted a waiver to our rules, and sent a letter to the entire community that painted the family as innocent victims and the 55+ community, many of whom had filed a complaint to the board, as bullies. Our 55+ assessment currently has about a $15,000 surplus, and the board is in discussions about stealing this money from us and using it to pay for projects outside of the 55+ side. There is now outright hatred of one side of the community towards the other.

Question
My proposed solution, at this point, is to advocate for a change in the bylaws that would call for the creation of a 55+ Board of Directors, elected solely by 55+ lot owners. This board would control the 55+ assessment and budget and would control the rules pertaining to the 55+ amenities. If we can convince the board to go along with this plan, I believe they can convince the other side of the community to go along. I have some thoughts about how to sell this to them, and while it would be difficult, I think we would have a reasonable chance of passing this; thus gaining control of our own destiny.
My question is simply one of semantics.

However, using the term “Board of Directors” will, I believe, be troublesome, as those who try to keep the peace constantly use the rallying cry “we are one community”, so the creation of a separate Board of Directors will sound like we are dividing the community. It would be helpful, from a PR standpoint, to instead use the term “55+ Committee,” which would sound less divisive. I know, silly, but this is all about selling an idea, not being rational.

I am curious, though, if it is okay to establish, via bylaws, a standing “Committee” that is elected by owners, rather than a “Board.” Are there any legal issues with a Committee being elected rather than assigned by the Executive Board? All suggestions are welcome, as I really don’t want to sell my home and move, again, at this stage in my life.

A committee assigned by the Board of Directors, who hate the 55+ side, with nothing in the bylaws giving the committee authority? That won't solve anything, because the Board of Directors would not be bound by anything the committee suggests. It has to be a change in the bylaws so the 55+ is granted legal authority to control their money and amenities.

"The 55+ side only has one of the five board positions, and it is unlikely this will every change."

if you want to pass the bylaws change, then getting the above fixed would be the first step. is there general apathy? or what is going on that prevents a 55+ from running and winning?

Numbers.

There are 450 lots owners who do not live on the 55+ side, and only 205 who do. They will always out-vote us.

Over 60% voted in our last election, and the board puts which side of the community each resident resides on. They have also weaponized social media to stir up sentiment against those on the 55+ side. Certainly we are, in parallel to the bylaw effort, strategizing on how to get more representation on the board.

But the ultimate solution, and the one to which I am seeking advice, is the correct way to structure a bylaw change that provides permanent protection of our rights while sounding attractive to the entire community. Can bylaws specify that a "Committee" be elected?

David, I have no idea if this is doable or not but have you explored what it would take to break away and become your own separate community? If the non 55+ community can't stand your community maybe they would be agreeable to doing this?

It would be the most difficult road - I believe it would require an 80% vote. And while the majority seem to hate us, they don't want us to break away because they love the fact that we pay 1/3 of the common expenses though we never really use the pool, clubhouse, etc.

It would require 80% of all lot owners, not just those voting. So that is a nearly impossible task.

I really want to concentrate on updating our bylaws, and would like to hear somebody address my question in my original post.

I'm with Kerry. I wish it was otherwise, but I don't see this going far without getting Lawyers involved.

BillD

Yes, I was okay with granting a waiver in order to avoid a lawsuit. But the letter was outrageous. It included false statements, as well as gratuitous comments that served no purpose other than to demonize the 55+ residents. The board then held a "re-welcome party" for the family that was/is in violation; showering them with gifts and cash donations!

As far as the $25/month, I am confident we can lawyer-up and get that money back. Some residents are already in the process. But we will always be at the mercy of non-55+ residents for deciding what to do with our money and how to set our rules. In the current situation, the board could easily change our pool hours to, say 5am to 6am. Or simply provide us with a budget of zero.

I think the best solution is to take a non-adversarial approach, with updates to our bylaws. The bylaws describe the board, budgets, and rule-making authority. We have to take the 55+ budget and rules out of the hands of the greater community.

No question we did not perform our due diligence; but it's really because it simply never occurred to any of us that the other side of the community would be so filled with people who are completely void of ethics, and so many others who are willing to support people like that. The irony is that we specifically chose a community that was blended between 55+ and all ages; because we did not want to be stuck with a bunch of old fogies. Now we desperately WISH we had chosen a stand alone 55+ community.

So here we are, trying to figure out how to most efficiently perform damage control in our lives.

That's a tough situation.

In "mixed" communities that I've seen, where you have significant differences between sections of the community, the bylaws often require something like proportional representation on the board so no one group can dominate - and that's even when everyone is working and playing nicely with others. But you need to have the necessary votes to amend the bylaws, and you may not.

I think the real issue here, unfortunately, is that the younger board members are being butts, are unqualified for their jobs, are damaging the community through their actions, and risking a lawsuit. Also unfortunately, if you don't have any legal tools to redirect or educate them, you may have to step back and let natural consequences show them the error of their ways. This is time consuming and messy, and everyone will pay the price. But sometimes you have no choice.

Of course, if the board messes up enough, the 55+ section will lose its designation. Will solve one problem, will introduce a bunch more.

This is kinda out of the box, but how likely is it that the 55+ section could legally secede and form your own HOA? The physical layout of the community would have to allow that (access to streets, ability to separate utility lines, etc.). But if it would, that may be something to consider since that section already has its own amenities. It's something to run by the association attorney to at least rule it out as an option. This could be quicker than waiting for the current board to blow things up badly enough to learn lessons. And separating may be expensive due to the legal work and maybe some construction, but so is a string of lawsuits.

(I blame the developer. I think I said this in another thread.)

I think if you are going to do that option, you will need to amend the covenants and make them a sub-association. This is because the covenants trump the bylaws.

What you put in your original post, and kindly repeated above, finally started to sink in.

First, what is the incentive for the non-55+ community to support this? Because your group will need the non-55ers' support when voting time comes.

Perhaps such an amendment reduces the main board's workload?

Second, I anticipate amendments of the CC&Rs and Articles of Incorporation would also be necessary, as they likely speak of a single board.

Third, I wonder if the model to use is that of a bona fide sub-association.

Fourth, I think preparing this (with an attorney) and getting out the vote will be a lot of work. Pace yourself, so if the effort ends up being for nothing, you won't be too unhappy? All you can do is try.

Maybe the attack by the board on the 55+ folks will bring the 55+ group even closer together to wage this battle.

We can offer a few incentives. First, bylaws now require a minimum of one 55+ board member, and we can remove that requirement. Second, currently a simple majority of 55+ owners can reject the BOD’s budget, and we can eliminate that. Finally, one concern on the other side is spending money defending lawsuits regarding our age restriction. We could include an ability for the board to enact special assessments just against 55+ owners to pay for legal expenses related to enforcing our age restriction.

But if we have to change our Declarations, which require a 67% vote, I won’t even try. 51% is conceivable, if very difficult. 67% would be out of the question.

Note:

You should not have a "surplus" of funds.

If you don't have a reserve study done yet, get one done. Otherwise, funds that should be deposited in the reserves but are spent elsewhere (because someone thought they were surplus) will come back to haunt the Association in the form or deferred maintenance or special assessments.

Special assessments for the common elements is one thing.

Legal expenses, part of the overall operating costs, is something else.

Strongly suggest the board get a legal opinion before implementing such an idea.

With the division within the development, I personally think you would do better suggesting a split of the Association.

Everybody on the 55+ would be elated with either a sub-association or splitting entirely. Geographically that would be fine, we don't share any common areas. But I don't think we have any way of accomplishing that, as it would require cooperation from the other side of the community.

As far as 55+ legal expenses, so long as we write it into the bylaws, wouldn't that be fine? That is something the other side of the community would be happy to agree to.

After reading all of this, i`m inclined to agree with John and Cathy. I don't know if an amendment will work unless you can convince a significant number of the "450 crowd" to support it. 8 yhink it's time to talk to your neighbors about seceeding from the community so you can run the 55+ community as you see fit. As things now stand you'll always get out voted because you don't have the numbers.

This won't be quick or cheap, and if you pull it off, you'll still have you address the owners with the grandchild - and possible bad publicity if you try to evict them. And your assessments will go up considerably because you won't have the larger community.

I wish I had a better answer for you, but if you'd like to try to get tge amendment, you andyiur neighbors need to begin talking to the "450 crowd" to support your bid for more say in all community issues. That may require a rewrite of several parts of the documents.

This should be two separate HOA. I don't think they should be under the umbrella of a master association. A 55+ association is a different beast within itself. If this would be me, and I were stupid enough to live in another HOA, I would be going to the local planning department of your city and also some elected officials. Attorneys, IMHO, screwed this up at the very beginning.

We've actually flirted with these issues in previous posts by DavidG45. I commented a few times that the developer appeared to be inexperienced since some decisions he'd made were setting up this community for problems in the future (IMHO). Basically he didn't seem to realize that the distinctions between sections of the community were legal ones and not just physical or economic ones.

In my area, all of the 55+ communities are either individual communities, or they are sub-associations within a larger master association and have their own CC&Rs, boards, finances, etc. In the latter case they function almost entirely as independent communities, with maybe an annual assessment paid to the master association for things like access to streets or utility lines.

Along with the others, I strongly suggest that the board of DavidG45's community talk to the association attorney ASAP. The laws governing 55+ communities are pretty strict and the consequences of not following them can be painful since these laws are an exemption from the Fair Housing provisions - and the "young guns" on the board seem determined to set the stage for a Fair Housing lawsuit, not realizing the money will be coming out of their pockets as well.

Just saying: I do not think a court would ever 're-write' bylaws. Courts interpret bylaws and occasionally, throw out amendments to same. Nothing more.

Nor do I see any elected official or city staff having grounds to take action here. Why? There's nothing unlawful in the covenants and bylaws. "A deal's a deal."

I continue to think the amendment option (yielding either a sub-association; a wholly separate 55+ association; or more financial independence for the 55+ association) is the best. I expect the volunteer hours to try to make this happen will be enormous, with no guarantee of success.

I agree. That's why the lawsuit is the final, desperate, option. Playing nice, staying involved, and being strategic at elections are the top priorities, because they are the most achievable.

The problem is that the other side wants our monthly $$$, most would not want to split. Even some on the 55+ would not favor a full split. I think the better opportunity is to give them some of the things I mentioned earlier, in exchange for letting us manage our amenities and money ourselves.

I the meantime, we will try to get reasonable people on the board.

Cathy wrote: "The sub-associations have separate, additional assessments to pay for their own common areas, and these are in separate accounts with separate balance sheets and separate budgets, and the funds are not co-mingled with master association funds." this is how it is for a our "Spiral Benefit Area" and it IS spelled out in our CC&Rs.